Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2005-09-16
Number: 05-085/1
Author-Name: Viktória Kocsis
Author-Email: kocsis@tinbergen.nl
Author-Workplace-Name: Corvinus University of Budapest
Title: Network Asymmetries and Access Pricing in Cellular Telecommunications
Abstract: Network shares and retail prices are not symmetric in the telecommunications market with multiple bottlenecks which give rise to new questions of access fee regulation. In this paper we consider a model with two types of asymmetry arising from different entry timing, i.e. a larger reputation for the incumbent and lower cost of servicing for the entrant as a result of more advanced technology. As a result firms have divergent preferences over the access fee. In case of linear and non-linear prices the access fee might still act as the instrument of collusion, but only if a side-payment is permitted which is generally welfare decreasing. Moreover, in contrast with the European regulatory framework, the access fee on the basis of termination cost might not necessarily be a socially preferable solution.
Classification-JEL: L11; L13; L51; L96
Keywords: cost asymmetry; brand loyalty; imperfect competition; network interconnection; access fee
File-Url: http://papers.tinbergen.nl/05085.pdf
File-Format: application/pdf
File-Size: 444550 bytes
Handle: RePEc:tin:wpaper:20050085